The funding policy will underpin the new apprenticeship levy, which will be paid by employers with a pay bill of more than £3m and will put the funding of apprenticeships on a sustainable long-term footing.
Among the main measures confirmed are more support for younger apprentices and disadvantaged people. Employers with fewer than 50 employees who take on apprentices aged 16 to 18 years old will have 100% of their training costs paid by the government. This will also apply to smaller employers who take on 19- to 24-year-olds who were in care or who have an education and health care plan.
£1000 each will be given from government to employers and training providers who take on 16- to 18-year-olds and 19- to 24-year-olds who were in care or who have an education and health care plan.
Providers that train 16- to 18-year-olds on apprenticeship frameworks will be given an additional cash payment equal to 20% of the funding band maximum in order to help them adapt to the new, simpler funding model
Providers that train apprentices from the most deprived areas on apprenticeship frameworks will continue to receive additional funding from government. More than £60million will be invested in supporting the training of apprentices from the poorest areas in the country, equalling around one third of all apprentices.
In a move to provide employers with more flexibility, employers will now have longer to spend funds in their digital account with 24 months before the funds expire, an increase from the original proposal of 18 months. The government has also committed to allowing employers to transfer digital funds to other employers in their supply chains, sector or to apprenticeship training agencies in 2018.
“The reforms we are rolling out will guarantee support from employers and government, so that millions of people can get the apprenticeships, skills and jobs for the future,” said Skills Minister Robert Halfon. “Our apprenticeship levy will boost our economic productivity, increase our skills base and give millions a leg up on the ladder of opportunity.”
To ensure higher-quality apprenticeships, the government has also introduced a register of apprenticeship training providers. All providers on the register will have to pass quality and financial tests. Those with an ‘inadequate’ Ofsted rating for apprenticeship provision will not be eligible to apply to the register.
Semta, the Science, Engineering, Manufacturing and Technologies Alliance, has welcomed the government's announcement after it called for clarity on the Apprenticeship Levy proposals since it was proposed by the then Skills Minister, Nick Boles MP, last year.
“There is some good news for everyone here," said Christian Warden, head of technical services at Semta. "Semta champions the use of skills to enhance social mobility and wealth creation so the new measures to help those from disadvantaged backgrounds are particularly welcome.
“We are ready to redouble our efforts to ensure that our sector overcomes any obstacles and makes the most of the opportunities that the Apprenticeship Levy will bring.”
